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Apple Is Right on Jobs Disclosure, Former SEC Chair Levitt Says

Steve Jobs, chief executive officer of Apple Inc. Photographer: David Paul Morris/Bloomberg
Steve Jobs, chief executive officer of Apple Inc. Photographer: David Paul Morris/Bloomberg

Jan. 20 (Bloomberg) -- Former U.S. Securities and Exchange Commission Chairman Arthur Levitt, once disinvited from joining Apple Inc.’s board amid differences over corporate governance, said the company has disclosed enough about Steve Jobs’s health.

Apple released an e-mail from Chief Executive Officer Jobs on Jan. 17 saying that he would take a medical leave of absence. The leave is his third since 2004. Levitt, who headed the SEC from 1993 to 2001, said the severity of Jobs’s cancer is well established and the board doesn’t need to share more details with the public.

“It’s easy to criticize the board, but I think the reality is that someone who owns Apple stock has got to be deaf, dumb and blind not to know that Jobs has an illness that can reoccur at any time,” Levitt said in a telephone interview.

Levitt has criticized Apple’s governance in the past, including in a 2002 book called “Take On the Street,” where he chides technology company boards for lax oversight. Levitt said in the interview that after leaving the SEC, he was approached about joining Apple’s board, and then Jobs withdrew the offer because of differences about governance.

In this instance involving the CEO’s health, Levitt said the board is acting appropriately and called it “insensitive” to pry too deeply into Jobs’s affairs.

“Jobs going on medical leave sends a message to the market,” Levitt said. “An intelligent investor should know the risks of Jobs having a relapse. For the board to opine on what the extent of the illness is right now I don’t think is really necessary.”

Investor Reaction

Investors may agree with Levitt. The stock has fallen 4.7 percent since Jobs sent the e-mail to employees about his leave. Shares fell more in earlier cases where Jobs’s health was in question, such as on Dec. 17, 2008. They dropped 6.6 percent that day after the company said Jobs wouldn’t appear at a conference.

Apple shares fell $6.64 to $332.20 at 12:33 p.m. New York time on the Nasdaq Stock Market. The stock jumped 53 percent last year.

“If there is a legitimate criticism of that board, it could be only for a lack of succession plan,” Levitt said in a separate interview on Bloomberg Radio with Tom Keene. “There I think the investors have to understand that the company should be held accountable.”

Levitt, a senior adviser at Carlyle Group LP, also defended Apple’s board in 2009, when it faced criticism about disclosing information about Jobs’s health. Levitt, 79, is a board member of Bloomberg LP, the parent of Bloomberg News.

E-Mail to Employees

Jobs, 55, in the e-mail to employees, didn’t say when he’d be back from medical leave.

“I love Apple so much and hope to be back as soon as I can,” Jobs said in the note released by Apple on Monday. “In the meantime, my family and I would deeply appreciate respect for our privacy.”

Since returning to Apple in 1997, Jobs has been vital to the development of industry-defining computer and technology products such as the iPod, iPhone, iPad, iMac and Macbook. With him at the helm, the company has gone from being 90 days from bankruptcy to the world’s second-most valuable company behind Exxon Mobil Corp. Shareholders range from mutual funds to retirement accounts to hedge funds to retail investors.

The Cupertino, California-based company and its board haven’t disclosed information about management succession plans, and have said little about the severity of Jobs’s condition. Much of the information has instead come from press accounts.

Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, said in an interview earlier this week that Apple hasn’t gone far enough in disclosing details about Jobs or plans for succession.

“The board needs to be open with the public about what they know,” he said.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net;

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.

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